I've been taking a closer look at monster alignments recently. I've finally come to some definitions of Law, Neutrality and Chaos that I like and completely avoid the whole Law=Good/Chaos=Evil problem while still keeping them very antagonistic.
Basically, Law supports order, civilization, and the advance of humanity. Chaos acts to undermine the above. Neutrality is a lack of concerted effort either for or against, and instead is focused on the best interest of the self or the small group (family, guild, etc.).
Now, Mentzer lists Elves, for example, as Neutral. I'm really digging on this. Of course, PC Elves will be whatever alignment the player wants, as it should be. But the elves of the wider campaign are mostly in it for themselves, their clan, etc. It allows elves to be both like Tolkien's elves (aloof but generally opposed to evil threatening them) and Anderson's elves (actively opposed to humanity, but also to evil), and maybe several other types as well.
BITD NPC Elves were always seen as potential allies, or at least non-opponents by me and my friends. But with a better defined sense of what that Neutral alignment can mean, I'm looking forward to having elves be opponents from time to time without resorting to gothy Drow or the watered down Dark Elves of the Hollow World.
Just a few other alignment related oddities--Living Crystal Statues are Lawful, yet the very Chaotic Bargle uses them as decoys in his dungeon. How would impersonating a rogue magician in order to keep him alive be in the best interests of advancing culture and humanity? It's something to think about and gives a nice bit of depth to those Bargle-decoys beyond the 'well, he created them so he commands them' line of thought. What if there's something about Bargle's plans that will prevent some doom, even though he's being a rat-bastard about his methods and his motives are far from pure?
Living Rock Statues, being Chaotic on the other hand, have some beef against civilization, and likely chafe at being commanded to protect or guard things that would lead to the betterment of man (similar to efreet chafing at just about any command).
Finally, Lizard Men are also Neutral. How often are they played as simply another violent humanoid race out to get the adventurers at all costs? Maybe it's because of the 12 morale. But Neutral aligned Lizard Men should be able to be allied with and bargained with as often as they just try to eat you. And a group of Lizard Men on your side can be a good thing, especially in low level adventures!
Nice food for thought.